457 Unforeseeable Emergencies

[30Rock]

Do unreimbursed medical expenses have to be unforeseeable in order to qualify for a hardship withdrawal under a 457b governmental plan?

[TLGeer]

Do unreimbursed medical expenses have to be unforeseeable in order to qualify for a hardship withdrawal under a 457b governmental plan?

Good question. The regs. are poorly written on this very point. The probable reading is that they do not have to be unforeseeable in fact. Don't forget the financial hardship requirement (i.e., suspend contributions, liquidate other assets).

Does the plan document permit loans? These are not subject to the same uncertainties, so a denial of a hardship distribution would still leave a loan available. And a loan does not require actual financial hardship or suspension of contributions.

Tom Geer